tv Fast Money CNBC May 17, 2013 5:00pm-5:31pm EDT
wall street. another winner as we capped off another record-setting week. the dow jones industrial average higher tonight at an all-time high. up 121 points. nasdaq, up ç33 points. 12 1/2 year high there. and the s&p in unchartered waters, as well, new high at 1667 with a gain of 17 even on the session. we want to thank everybody here for having us on their trading desk. that does it for us today have a fantastic weekend, everybody. i'll see you on monday. "fast money" begins right now. and live from the nasdaq market site in new york's times square, i'm mandy drury. happy friday, everybody. i'm sitting in for melissa lee. here is what fast is following. fool's gold. stakes are climbing for the miners after gold has its worst week in more than four years. a look at the likely consequences of that ahead. facebook coming in as the worst performer in the nasdaq
100 since its ipo a year ago. should you date, dump or marry that stock? the traders are going to make it official. and disrupting big oil. which up and coming energy companies are challenging the most powerful names in the sector? yeah, we're tackling the postgame analysis and set up for tomorrow with brian kelly, tim seymour, josh brown and guy adami. blokes, good to see you. >> blokes? >> that's an australianism for guys. to me, you're blokes. okay, first up, lead story. the markets closing yet another week on an up note with the s&p hitting anç all-time high toda. the question here is, whether or not the rally can keep on climbing higher would a pull-back. let me get to you, b.k. this is absolutely incredible. every single day, a new record and people are starting to really hate this. >> yeah, me included. listen it's astounding. i wish i had something a lot more insightful to tell everybody, but it just keeps going up. i do think what the story of the
market today was was the u.s. dollar. there's just been incredible strength in the u.s. dollar. first time the index has broken above levels that we haven't seen since 2008. that's driving a lot of the financial markets. it's helping the u.s. market now because people are putting money into the u.s. stock market. you have to start asking questions about, what is that going to do sh. >> and tim, this is kind of your area. at what point is a strong u.s. dollar bad for the u.s. stock market and the u.s. economy? >> there's a time when i think unofficially, the treasury was very happy to see the dollar weakening, mandy. at this point, the dollar strength, i think, is more or less built off of fundamentals. it is a case of, if you take the dollar index back to a place where we really were in a dollar-centric mode that was not based upon a systemic risk, we're back in july 2007, roughly. so, if you look around the world, mexico had gdp out, 1.2%, russia at 1.6%, south korea at 1.5%. the u.s. is at 2.5%.
the u.s. is growing aç lot faster, higher than some of the growth economies, so, it's a case that the fundamentals are better right now. let's wait until we worry about the multinationals at earnings time. right now, people are clicking along. the data was better today than the data yesterday. so, the u.s. economy is something that people are able to get behind though valuations, to me, is where it comes back to and i don't think we're terribly cheap here. >> yeah, already those multinationals, we saw that in the last earnings season, are starting to whine about the strength of the u.s. dollar and i'm sure it's going to get louder and louder. guy, how about you? do we just sit this out, pull out our money, do we rotate, do we go into particular names? >> i don't think you have to pull out your money. john talks about this all the time, volatility where it is, there's no reason, especially after the moves you've seen in the last week, week and a half, not to buy protection on the to sixes you already have. if you don't want to spend that money and put protection, maybe sell some upside calls, though you're not getting paid enough to do it, in my opinion. it makes a lot of sense to
protect yourself with options right here. you understand why stops don't work in this market, because from time to time, we sue ridiculous moves that get you blown out, only to see the market come right back. to tim's point, it feels like it still has legs, because it gives no indication right now that it wants to stop and we've said that for awhile. as long as we stay above 1570 in the s&p, it remains intact. >> i'm so glad you mentioned options because we have a action" right after this one. >> are you hosting that one? >> no, but that's correction protection. brian? >> if you don't want to just pick individual options, look at the vix index. it's real low. you can buy calls on the vix. if you get a big downdraft, you're gouge to make some money on that and they're relatively cheap to buy. >> tim? >> big day for financials in the u.s., but we really like global banks, places where low inflation is really helping the banks where they are not as concerned about a steep yield curve. these are names you can buy in new york.
these are names where the banks are making more money, low benign environment for them. >> the financials were the leading sector this week, weren't they, in the market up by 3%. josh what is your top trade? >> ah, ford looks really interesting. this is a clear breakout on a daily and weekly chart. not a stock people talk enough about. quite frankly, it plays into a lot of the different themes in cross currents that are going on right now. and it just gets back to what the general trend of the market is going to be, in my view, what we're not witnessing is anything extraordinary. it's mean reversion, the market multiple had been depressed going back to 2010, because there was always the next crisis. right now, what you're seeing are investors are rejecting that thee th thesis is the next black hole next week. it's getting back to where it was ç1970s. ford should work in those circumstan circumstances. it should do as well as the large cap market. >> guy? >> one of the sectors left for dead has been defense.
we sort of talked about it in the fall. i think lockheed martin is starting to get its mojo back. it is at a three-year high here and i think it still has room to run. >> got it. okay, for the seventh trade session, worst losing streak since march of 2009 and we know what happened back then. what will the gold slide mean for the miners? for more, let's bring in lincoln ellis, chief investment officer of the stroo teejic investment group. let's look at the macro picture for gold. is this bubble blown once and for all? >> it's certainly into bear market territory. gld has been significant holding the miners has been twice the pain, so, the bloom is definitely off the rose in the gold market and the gold miners are feeling it, too. >> and for how long, i mean, to what degree do we want to play this, maybe even just for short-term? >> look, i mean, it's a bit of a complicated trade. the gold miners are not just gold miners, they mine other
things, too, silver and a lot of the base metals. that started the first bit of that leg down. this second piece, this capitulation piece, which has really driven that divergence, relative to the gold price, is now firmlyç in place. 20% deviation this year. and things are starting to look cheap. when that cheapness comes in, you can begin to see activity among the miners, some consolidation, that would be use. . maybe cutting off supply. >> it's all relative to valuation, as you say. i look at bthat, it's a fair multiple. but it's based on the gold price. bank of america has it at $15.60 on a ten-year average. i think it's a big stretch. i think it's a big strength if the dollar continues to strengthen. >> gold will continue to come down. the margins will get compressed and the valuations will continue to look reasonable or in some cases, slightly cheap. hopefully you get consolidation in the bottom part of that index, right? and that would be helpful to the
top tier players. >> i'm sorry, all of the research suggests that at this point, gold is essentially a play thing of the asset management industry. gld is now driving the price of gold, more so than anior factor. we can talk about mining, shut-ins, anything you want. but it's paper gold deciding what physical gold is worth on a day-to-day basis. given thatpremise, what would you say to the con cement that the miners are a play on a safe haven? is that completely out the window as they're at the mercy of wall street and the large asset management? trade, right? dollar, gold, u.s. treasuries. we only really ever liked two at one time. now gold has fallen off and people are beginning to look at, what is the real driver of that price? everybody who has wanted to be long gold has been long gold. and that trade is over. those people are exiting that trade and now you're back to the fundamentals. and that's really more, as tim
says, an emerging market story. that's where the fundamental demand is, china, india, things of that nature. maybe moving away from gold as the driver, by looking more to the fundamentals of what's going on in the mining business may be reason to take a second look at them. >> and lincoln ellis, thank you for your thoughts. we have some breaking news now from kate kelly joining us on the phone. what is it? kate? >> mandy, thank you so much. fac issuing a letter to its investors, telling them two important things. they are changing their stance with the government, as the government continues to investigate ss.a.c. on a criminal level in terms of potential misconduct, insider trading allegations that have swarmed around the firm in recent years. they are changing their stance. their cooperation, they say, with the government is, quote unquote, no longer conditional. and the other thing is, they are going to be keeping their currents closer to the vest, even with investors as they move forward an important legal deadline, at the end of july, by
which federal prosecutors have to bring any criminal charges against steve cohen in connection with a prior case. so, two interesting elements to this investor letter today. they also said they don't believe the changes in posture that they're adopting, mandy, will have a quote unquote financial impact on their fund. so, essentially warning people. they're not necessarily playing nice guy with the government anymore, where as up nm nuntil they've been entirely cooperative, they said. and they are saying they may not be able to say much between now and july. >> but kate -- i think they said it's not unconditional, right, so, i just -- >> correct, that doesn't mean they're not cooperating, but it's not unconditional, so, what the conditions are, of course, we're left to wonder. it does give the sense that things are heating up between the government and s.a.c. and s.a.c. feels that it needs to take a toucher stance for whatever reason, whether that's just to gain some negotiating leverage or they feel that they've been put more on the defensive as a result of new
facts that we're not aware of it. >> right. no one is going to bristle and stand up to the government here if they really don't feel like they've been pushed too far. sounds like they are warning their investors, there may be something coming down the pike, if it's going to force their hands in terms of funds they have to close, in terms of redemptions, things that are going to be out of their control, so they're warning people of bigger things to come. >> well, i'm glad you brought up the redemptions issue. that's an importantç point. s.a.c. has a quarterly deadline that notice investors have to give is 45 days before the end of the quarter. in this case, however, the redemption deadline is going to be moved two weeks from the usual point, so, it's now june 3rd. from what i'm told, s.a.c. feels as though investors are getting increasingly uncomfortable with the legal lack of clarity, they do hope, of course, to have some clarity by the end of july, though that won't resolve every matter. there are a number of pending matters facing the firm. so, you know, they're hoping to
keep investors happy to allow them to wait a bit, to not take out their money until they have more information, but we'll see what vote of confidence they get at the beginning of june. >> you're absolutely right. it does feel like a harder stance is being taken here. kate kelly, thank you for the breaking news. coming up on the show, big oil, look out. we're going to revel tal the din torps. and, the biggest pops and drops of the week, as "fast money" returns after this.
market leaders. cnbc's julia boors tin has the final industry reveal. >> we're wrapping up our 2013 cnbc disruptor 50 list. the companies shaking up the energy sector. technology and innovation are pushing america into a new era of energy independence. led by the shale book and record solar installations. light sail energy uses compressed air to create heat energy that can be stored and used more efficiently. which could boost the adoption of renewable energy. but there's the potential to disrupt traditional energy. microseismic is monitoring and malling and could increase the pressure that shale energy is already applying to big coal companies like pea body energy and even renewable energy sources like first solar. in the global fracking debate, hard data on emissions is
critical, but numbers have beeno lacking. enter picarro, chose tool can give governments the data they need to push for emission caps, taking a bite of the shale boom's rich profits. with high energy prices and a finite supply, startups are angling to change user habits. through online platforms and apps, opower givens individuals a total breakdown of their power usage. the company is hooked up be 75 utility companies, giving opower a 15 million home reach. nest takes your old theorem stat to the next level. from ipod creator tony fadell, the programmer smart thermostat creates temperature schedules to maximize energy efficiency. that's it for our disruptor 50 list. if you missed any of our big reveals, you can find the entire list of companies and a lot more great content online at disr cnbc.com. okay, let's trade some of the companies that could be disruptive. who am i going to start with first? what about you, tim?
>> well, as a bloke, as the lead bloke here for this question, ultimately, you know, you look at the coal guys and they've already been disrupted. i don't think this is a place, unless you are talking about the companies like walter energy, where people are worried about the balance sheet, i think you have this priced in. i would look at exxon and these are guys, first, as a stock, this has been a massive underperformer. this is one of the best companies in the world but a company in terms of innovation, i think is doing the same thing a lot of these companies are. i think thirç is an opportunity in exxon. this, to me, at three times -- 3% dividend yield and valuation that's somewhere around eight times here, is very, very attractive. this is a company that's unts underperformed. if you think these are innovating, exxon is doing it. >> fire power for it, doesn't it? >> no one is disrupting a $250 billion company. what ends up happening, exxon looks and seeps what they're doing, we say, all right, we'll buy you, how much do you want? you want $100 million for a new technology? the thick ng to keep in mind, t
have underperformed to some extent. i totally agree with tim seymour. i'm long chevron, not exxon, because about hatch the size, same dividend. the other one that i just started getting involved is oxy, just broke 90. i think it's going to do the $100 role. >> i do believe that's also one of the mandy's mavericks, cnbc stock draft picks. >> it is. >> thank you, josh. it is friday, and that means it is time for the biggest pops and drops of the week. okay. first of all, a pop, goodyear tire popping 15%. josh? >> you know, this is a stock that's had a clear uptrend all year long. now it's taken that out. the fundamentals are great. the tech any cams are great. i don't see any reason why you wouldn't stick with this trade. >> cisco a pop by 15%. b.k.? >> great story on earnings. one thing about cisco, you get a really good dividend. everybodyç looking for compani that you're not going to get hurt in but still get a nice dividend. i would love to buy cisco on a pull-back, up 15% is tough for me to buy. >> another stock was in the
stocks draft, with cliff's natural resources, dropping by 11%, tim. >> yeah, clutch's had a tough week. china steel production is going through the roof, so, prices are coming down. cliff has been beaten, but again, this stock, i think, has seen its worst, $20.50, i would stay in this one. >> let's go for a pop with netflix, popping by 10%, guy. >> "fast money" fave. a lot of analysts shooting against this one. i still think it marks higher. very high to buy it here but netflix has been a monster there, sheila. you know, sheila, by the way -- >> yeah. >> is the -- >> aussie equivalent of a bloke -- female. >> is it insulting? >> absolutely not. >> you know what, guy, when weapon go out to times square, why don't you start sheilaing the next four, five girls you see, see how that goes for you. >> okay, you can try that, as well, dear viewer, let us know how it goes. those were some of the biggest moves of the week.
but let's look back on some of the best moments this week here on "fast." >> that tie is -- >> partridge family. >> you held it hort zonally -- >> you know what i love on planes -- >> warm nuts. >> when they give you -- >> obviously. >> thatç thing -- >> warm nuts are the best. >> this is something based on the middle east -- not middle east. middle ages when basically they would say, is it a pig and a poke, is it really a dog or a cat? >> oh, my god. how much would you pay for a topless picture of maud? >> you know what's funny? when i graduated from business school, they came to campus looking for somebody to drive that around the country for the summer? >> and? >> i didn't get the job. >> i obviously thought that was bizarre and -- >> you thought it was bizarre i didn't get hired, not -- >> you should have owned that job. >> okay, coming up next, is facebook a name that's good for just a fling or is it one that you should be settling down
♪ now that we found love >> if you didn't know already, facebook is the worst performing stock of the nasdaq 100 since its ipo pricing a year ago. well, our traders tell you whether to date, dump or marry that stock. b.k., what would you do? >> i would dump it. aye said from the beginning with facebook, the only reason why you own it is that you think mark zuckerberg has the ability to beç the next steve jobs, to innovate, to turn the 800 billion different users that they have into something more. so far, he's proven that he hasn't been. the current management proves that they haven't been able to do that. dump it. >> tim? >> i'm falling in line as a dump, but dumping assumes you were actually doing. i wasn't even looking at this bloke, excuse me, sheila -- >> whoa. >> try that again. >> face-bloke was not working for me. and despite the fact they are beginning to monetize their mobile business, this is not a name i want to play.
in terms of the chart, it's not even a trade here. therefore, i'm a reluctant dump and i'll leave it at that. >> josh, what about you? >> yeah, i -- i would kick the thing out of bed, but it was never in the bed. it's a broken momentum stock, so, out of $63 billion valuation, you basically had to believe in magic and magic was possible but it never came along. now, you have a stock that's below the 200-day, 50-day, $60 billion market cap. rsi is under 50. there's just not happening. >> guy? >> three dumps on the desk suggest many things, but -- you know, facebook to me, given the quarter, they seem to be figuring out this mobile thing. i'm going to start to date that see lachlt. >> you want to let us know how it goes? >> i certainly will. >> where you going to take facebo facebook? >> why not? >> let's go0a =u9 th your first move on monday. b.k.? >> dollar still the sorry
shofrment the canadian dollar. >> tim? >> the move in the market is having an exponential effect on the online brokers and some of the mutual funds. legg mayson, great turn around here. >> josh? >> ford. >> guy? >> green hill. >> wow. that was quick. when they sick quick, you go quick. i'm than dmandy drury, catch "f money," 5:00 p.m. eastern. make it a date. "options action" begins right after this break.
this is "options action." tonight, is tesla just too hot? >> this is the automobile you should be using. >> dan nathan says nope, more room to run. and he's got a trade that could put your portfolio into overdrive. he will break it down. plus, missed the rally? >> no! >> relax, because mike khouw and carter are eyeing one dow component that could be profits in your portfolio. how you can make money. and why is this hollywood